I am basing this question on a NPR podcast which discusses how Netflix became profitable after nearly folding. In this piece, the idea of 100% human resource efficiency efficiency is touted as a goo, and even liberating thing.
For me though, somehow decoupling work from all other human values such as loyalty, rewarding effort etc. seems a little unsettling. Perhaps I am just getting old and can’t get with the times.
Can you summarize a bit? I don’t want to listen to a whole NPR eposide
Sure. The basic gist is that at Netflix they will let people go, even if they are hardworking, loyal to the company, good or even amazing at their jobs, as soon as they are not useful. There is no moving good people into other areas of the company, no retraining for other departments etc.
In this piece it is touted as a good thing that the company is unapologetically willing to let anyone go the moment they are no longer useful; even if they are good, hardworking and loyal.
I tried to summarize it in the most neutral way above; but it is can be hard to do on such a topic.
Yeah, I’m listening to it now. The idea seems to be “get rid of all of the slackers and that will put weight on the real workers and all of a sudden half the people can do 5 times as much work because everyone is now working as hard as they can!!!”
Except… most of the examples they seemed to be talking about were white collar jobs of one variety or another.
For example, how can you build a house or pave a highway faster if you get rid of 1/3 of the workers? How dos this model work when your job actually entails real work?
There is a lengthy explanation of their philosophy by the former chief talent officer at Netflix here: How Netflix Reinvented HR
This is insane!!!
Basically… they fired a bunch of people when the company started out… apparently people who had white collar management type jobs…
So, skip forward a few years and they had finally worked out making their DVD by mail thing fully automated. This whole time the company mantra had been, if your job does not produce you are fired! That is, translated and summarized, exactly what the company mantra was. Anyway… they are going to fire the last employee who was still stuffing DVD’s by hand. The employee was crying because they lost their job. They said, but I’ma really good worker, can’t you find some other job for me at Netflix. The boss said:
No, you are a great worker. Why do you think we kept you so long. But we have no other job for you. Now quit crying, go out there, and tell people you used to work for Netflix!!!
(apparently, working at Netflix had some real big time reputation in Silicon Valley at that point)
BTW, I think my account is pretty accurate. If i got any part wrong the other poster can correct me.
I was reading a book on the evolution of the cell recently (I can’t remember the title), quite a large part of the book was about coral and similar organisms in the fossil record. Coral lives in what is essentially oceanic desert, i.e. an environment where resources for organisms are very scarce making it fairly inhospitable for life. What allows coral to live in this environment (and the ecosystems that grow up around coral) is that it is incredibly efficient in using the resources that do exist there.
Interestingly though coral is by no means the first organism to fill this evolutionary niche: if you go back through the fossil record there are a number of unrelated colonial organisms that filled the exact same niche as coral and used very similar strategies at different times. Even more interestingly there is a pattern repeated several times over of one kind of organism filling this niche only to be completely wiped out and then a little later for a completely unrelated organism to fill in the niche.
The explanation given in the book is that these organism’s efficiency is there own downfall, i.e. because they are so efficient and operating on tight margins, when some kind of major environmental change occurs they are extremely vulnerable to extinction. To put it crudely, they have nothing spare to use to cope at a time of crisis. Even at the moment we see coral bleaching caused by small changes in the temperature of the oceans brought on by global warming.
The organisation I work for has been pushing massively for efficiency over the last few years and part of my job is to think of new ways in which my little area can be more efficient and put into place and enforce them. Whilst I agree broadly as we did previously have some fairly gross inefficiencies and I still get into arguments with people about certain practices which I believe are just a pure waste of time. However I also see that the more efficient certain areas get, the more difficult it is to adjust whenever there is a change or a crisis of some sort because the system is set-up to work very efficiently in one particular way and there isn’t that extra capacity to absorb the extra work.
In other words, there is a lot to be said for efficiency, but people often forgot efficiency itself can create problems and I prefer a slightly more balanced approach in which the abilty to cope with change is in built, even if it is a little less inefficient.
LOL, now she is saying she hates the word “fired” because no one actually gets shot!!! Plan on having a long career (in IT). Just not at Netflix!!! think of it a a journey.
Literal words
They were all white collar jobs, that is part of what is interesting to me about this. Ostensibly when I was growing up, you spent years in school and studied hard, made sacrifices so you would have a white collar job that made you valuable to a company - less expendable.
Blue collar workers have been expendable in this way for a long, long time. After a construction project is done, layoffs occur for blue collar workers - it is just expected. Part of the point of becoming white collar was more job security - or at least that used to be the point.
Yeah, but how can you build a house faster with 1/3 less workers? Or pave 100 miles of highway? The Netflix firing model does not work for jobs that actually take real labor or real work.
I think work ethic is definitely a virtue.
But it’s not necessarily productive.
I’ve got a coworker right now that’s kind of pissing me off. I’ve been waiting for him to send me a dataset for three months now, and I’m fixing to snitch on him to the boss. He isn’t a lazy fellow at all. Every time I walk by his office he’s punching numbers into a spreadsheet. He even works on the weekends. The problem isn’t his work ethic. It’s his poor management of his responsibilities. He could delegate some of his duties, but he chooses not to. He could learn how to manage an Access Database, but instead he chooses to be “old school”. Instead of constantly telling me I’ll have that data by the end of the day, he could tell me the truth so that I can stop relaying bad information to others.
I have no doubt that he’s just as loyal as he is hardworking. But those things don’t have any bearing on his productivity. And really, that’s what we’re getting paid for.
It is frightening to think about, though. There comes a time when everyone falls short of their maximum productivity. It is scary to think that your past stellar performance can be so easily forgotten.
We are a team, not a family, we will replace you as soon as someone else can do your job better. We are an A level sports team.
More direct quotes.
Sounds like the Soviet Union. 
Ha Ha!!!
Vindication
The bitch that fired everyone wound up quitting because Netflix was moving to Hollywood and starting shows like House of Cards and Orange Is The New Black. Stuff she had no experience with at all, actually making television. So instead of getting fired she quit before they could fire her. It was really upsetting to her for a long period of time. Even to this day she does not like to speak of her exit from Netflix!
Blue collar model = We build house, hire extra workers, lay them off as soon as house is done. We keep the project managers, foremen, and all higher level positions.
Netflix model = We build house, hire people to build it, lay everyone off at the end.
It’s not about hiring enough people to do a job, its more about what is considered essential to the company. At Netflix, no person, no skill set has long-term relevance. And the trend for all companies is to follow this lead.
I think the problem I personally have with it is is that I think it is bad for society as a whole. In this scenario, all workers are an underclass - even white collar workers. If you take any one person, they are going to live around 80 years, of those 80 years, they will have 10 where they are at their most efficient. If most people are only valuable in the workplace for 10-20 years, yet live for 80 years it seems unsustainable.
One thing left out of the explanations:
She said, they wound up firing so many people that they figured out, if you give people a good enough severance package - most - people will move on and think it is a good thing.
Well what about all the people that got fired before you figured that out???
It’s nothing to get excited about. It’s not really much of a vindication if the same practices are in places and this philosophy is spreading and expanding. One mean heartless person having something bad happen to them doesn’t change any of this.
Ah, ok, that was a good way to explain it
which would be OK, if, there are enough jobs for people to find another job
Yes
Yes, of course, it is just nice to see that she got a taste of her own medicine is all
What seems odd to me, honestly, is the idea that your choices are to dummy up a fake job, or fire the person whose skills have become irrelevant. Possibly high tech is different, but in my world finding really good people–people who are reliable, learn quickly, work hard, get along with others–is not easy, and any time you hire a new person based on “skills”, it’s a crap shoot as to whether or not you will be able to use those skills because the other things will get in the way. When you lose that gamble, it’s a horrific mess. When you have truly good people, it really seems like the best course is to develop your people strategically, looking far ahead, so that their skills keep up with the company needs.
In other words, in my experience it’s easy to teach a good worker skills than to teach a skilled flake or misanthrope to be a good worker. Companies that don’t give those workers the time or opportunity or guidance to develop those skills seems short-sighted.
I think the harder case is when you have okay people who are unwilling or unable to learn new skills but who feel like simply not messing up should obligate management to find them something to do. I work with a lady who is in her 70s and just doesn’t feel like she should have to learn much technology, especially stuff from the last decade. It wasn’t part of her job when she started, she’s never messed up her original job, it’s not fair to expect her to learn all this new stuff. Other people need to take care of it for her.